IMF raises Bangladesh's economic growth forecast for FY21

The International Monetary Fund or IMF has scaled up its projection for Bangladesh's GDP growth to 5 percent in 2021, from its previous forecast of 4.4 percent in October last year, amid concerns over the country's economic prospects in the wake of the coronavirus pandemic.

The South Asian country's economy is expected to grow 7.5 percent in 2022 as the global economy looks to regain its footing with the worldwide rollout of vaccines, the IMF revealed in its latest World Economic Outlook report on Tuesday.

The report follows the World Bank's revision of Bangladesh’s GDP projection to 3.6 percent in fiscal 2021, compared to its earlier forecast of 2 percent.

The IMF also raised its outlook for global economic growth again, forecasting worldwide output would rise 6 percent this year, a rate unseen since the 1970s, thanks largely to the unprecedented policy responses to the COVID-19 pandemic.

That upgrade, from 5.5 percent less than three months ago, largely reflects a rapidly brightening outlook for the US economy, which the IMF now sees growing by 6.4 percent in 2021, the fastest since the early 1980s.

Meanwhile, the projections for emerging and developing economies in Asia for 2021 have been revised up by 0.6 percentage point, reflecting a stronger recovery than initially expected after lockdowns were eased in some large countries such as India, the report said.

The IMF forecast, if realised, would mark the fastest pace of global growth since 1976 but also comes off the steepest annual downturn of the post-war era last year as the pandemic brought commerce around the world to a near stand-still at times.

The fund said the world economy contracted 3.3 percent in 2020, a modest upgrade from an estimated contraction of 3.5 percent in its January update.

The latest World Economic Outlook - released at the start of the IMF’s and World Bank’s spring meetings - reflects a dramatic divergence between the outlook for the United States and much of the rest of the world courtesy of another $1.9 trillion in pandemic relief spending recently enacted in Washington.

The outlooks for other advanced economy heavyweights, such as Germany, France and Japan, hardly improved at all since January.

Forecasts for emerging market economies, while somewhat improved, took a back seat to their developed peers. The fund’s outlook for EM economies rose by just 0.4 percentage point - half of the advanced economy mark-up - to 6.7 percent from the view in January.

[With details from Reuters]